Novo Nordisk 3Q Net Profit Rose as Pandemic Disruption EaseD -- Earnings Review
31 October 2020 - 12:29AM
Dow Jones News
By Dominic Chopping
Novo Nordisk AS reported results for the third quarter on
Friday. Here's what we watched:
SALES: Sales rose 2.1% to 30.93 billion Danish kroner ($4.85
billion) against the DKK30.82 billion expected in a FactSet analyst
poll. The Danish pharmaceutical company had already pre-announced
third-quarter numbers in local currencies, saying both revenue and
operating profit grew 7% on year. The company noted
lower-than-anticipated negative impacts from the coronavirus
pandemic, as well as underlying market demand. Sales growth was
also helped by inventory changes at U.S. wholesalers, it said.
NET PROFIT: Net profit rose to DKK10.3 billion from DKK10.19
billion a year earlier, just shy of the DKK10.35 billion forecast
by analysts in a FactSet poll. The company said patients in the
U.S. and Europe in particular stockpiled medicines in the first
quarter amid the coronavirus pandemic, but these patients destocked
during the second and third quarter. It also noted a gradual
recovery in the number of patients initiating treatment in the
third quarter.
WHAT WE WATCHED:
GLUCAGON-LIKE PEPTIDE-1: Novo Nordisk's glucagon-like peptide-1
drugs, or GLP-1, to treat type 2 diabetes had a 31% increase in
sales in 3Q on the year, driven by an 82% rise in Ozempic sales to
DKK5.43 billion, offset slightly by a 7% sales decline of its
Victoza drug to DKK4.77 billion.
MARGINS: The gross margin was 83.3% in the third quarter
compared with 83.2% for the same period last year. The slight
increase reflects asset impairments in 2019 as well as positive
product mix and productivity, partly countered by a negative impact
from lower realized prices in the U.S. and a negative currency
impact of 0.3 percentage points. The operating margin slipped to
41.4% from 42.7%.
GUIDANCE: Novo Nordisk also recently upgraded its full-year
guidance, expecting both sales and operating profit growth of 5%-8%
on year in local currencies, after experiencing a
lower-than-anticipated negative hit from Covid-19 and underlying
market demand. Novo Nordisk said Friday that it now see sales
growth in Danish kroner around 3 percentage points lower than in
local currency and operating profit growth around 4 percentage
points lower.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
October 30, 2020 09:14 ET (13:14 GMT)
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